Limited declines in the Dow Jones index influenced by American companies' earnings reports

Dow Jones index fails to surpass main resistance level at 34,500 points

By Laila Eid | @Laila Eid | 20 April 2023

Will the Dow Jones break the 32400 level_-20230419-135147
  • The Dow Jones index has experienced declines since the beginning of this week

  • There have been strict statements made regarding the monetary policy of the US Federal Reserve

  • The markets are anticipating several important economic data releases

Current economic factors affecting the Dow Jones index

The Dow Jones index closed with minimal declines yesterday, hovering around the 33,861 level. US stock indices have remained stable since the beginning of the week as investors await more quarterly earnings reports from companies in the first quarter of this year. At the same time, Federal Reserve members are making strict statements about the future path of monetary policy ahead of the upcoming Federal Reserve meeting.

On Monday, Federal Reserve member Thomas Barkin stated that the bank needs to see more evidence of a decline in inflation rates before making any decisions regarding easing or stopping the tightening of monetary policy. He also noted that the bank is on its way to achieving its targeted levels. In addition, Federal Reserve member James Bullard believes that the Federal Reserve should raise interest rates given the lack of significant progress on inflation. Bullard's statement has strengthened the USD against other currencies, leading to market fluctuations.

Investors are also waiting for several important economic data releases from the United States, such as weekly jobless claims and the performance of key sectors. These releases will provide evidence of the US economy's performance at the beginning of the second quarter of this year.

Key levels affecting the movements of the Dow Jones index

The movements of the Dow Jones index are impacted by several key levels, including resistance and support levels. The index managed to surpass the resistance level of 33,300 and continued to rise to the 34,100 level. However, it was unable to surpass the most important resistance level of 34,500 and fell to trade around the 33,750 level. It is possible that a correction may occur, testing the important support level of 33,300. It is crucial to maintain this support level to demonstrate the intention to rise again.

In the event that the index declines and breaks the support level of 33,300, prices are likely to remain below it, and the decline may extend to the 32,600 level. If this level is also broken, a further decline to the 31,500 level may occur.

On the other hand, if the index manages to surpass the strong resistance level of 34,500 and prices remain above it, the rise may extend to the 35,400 level. If this level is also surpassed, the index may break the all-time high level of the Dow Jones index, reaching around the 37,000 level.

dj 30 4-20-2023